Air Canada, Pilots Reach Deal Expected To Revive Boeing Order

Air Canada hopes to salvage its canceled order for as many as 100 Boeing 777s and 787s after the carrier reached a deal Friday with its pilots' union to resolve a dispute over pay for operating the new long-haul aircraft.

The airline in June placed the large order which was going to provide the foundation for the airline's growth plans. Shortly after the order announcement, however, the Air Canada Pilots Association rejected a tentative contract that would have allowed the airline to start flying the new planes, and management canceled the order (DAILY, June 21). The deal was rejected partly because of bitter feelings toward management over pay cuts in 2003 and the merger with Canadian Airlines in 2000. An unofficial, grassroots pilot group lobbied against the agreement.

More recently, the dispute was reviewed by the government's labor board and management was optimistic it could renew the Boeing order (DAILY, Aug. 8). Boeing, however, already moved the first two 777 deliveries for Air Canada to a European carrier. On Friday, Air Canada and the union reached a "protocol agreement detailing terms of a binding arbitration process." Through arbitration, "the airline will obtain certainty on pilot costs and other issues relating to the new aircraft."

Subject to a "satisfactory outcome," Air Canada would "re-engage Boeing to conclude an agreement on the acquisition of 777 and 787 aircraft.